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Arbitrage Betting: How Does It Work & Examples
Done correctly, arbitrage betting delivers a guaranteed profit. It won’t be a huge profit in terms of a single arbitrage play but as anyone who’s ever seen the movie Office Space recognizes, even making pennies off each investment can add up quickly if you’re consistently delivering that profit over and over again.
Arbitrage betting is a formula for placing bets that cover every outcome of an event and provide odds that will guarantee a profit no matter the eventual result.
Suppose it’s the Wimbledon men’s singles final between Novak Djokovic and Rafael Nadal. These are the top two players in the world, so clearly, this match could easily go either way.
Sportsbook A has established Djokovic as the -102 favorite. At sportsbook B, Nadal is set at underdog odds of +120. At the first sportsbook, you wager $100 on Djokovic to win the match. Now, at a second sportsbook, you’ll need to bet $90.02 on Nadal to be the winner.
By playing a wager on both ends of the outcome, profit is assured. Sure, it won’t be much – just $8.02, a 4.2214 percent return on investment. The thing is, you can play these arbitrage-style wagers again and again and you will never suffer a loss.
That being said, finding and scoring with arbitrage betting is growing more and more challenging. Sportsbooks are on the lookout for these types of bets and frown heavily on bettors who frequently play arbitrage bets. In some cases, those players may be banned from the sportsbook.
The odd stake of the second wager – in this case $90.02 – will usually send up red flags at a sportsbook that something is amiss. If you’re going to play arbitrage wagers, it’s always wise to round off that number so as not to set off those alarm bells with the bookmaker.Another popular option for arbitrage bettors is to play at least one end of the two wagers with a betting exchange such as Betfair Casino or Smarkets. At an exchange, since you’re placing a wager with another bettor, as opposed to the sportsbook, they aren’t going to be concerned about whether it’s an arbitrage play. They get their commission for setting up the bet regardless of that situation.